This post is sponsored by Teacher’s Mutual Bank
I will forever be grateful to my parents for teaching me about money and how to manage it well as a child.
As an adult, this has meant that we have had very little money stress overall because I learnt to make small, consistent good choices with money. We are not rich and I know it isn’t always that simple, but I also know that the best way to help your children to be financially stable as adults is to teach them about money and how to manage it from a young age.
My first experience of money growing up was in the form of pocket money. We always had to do non-paid chores in our house as my parents thought it was important for us to learn how to work without always having to get a reward. Other jobs sometimes had incentives though like washing the car, mowing the lawn or doing jobs in the garden.
As we got older and started needing money for social outings with our friends, my parents gave us weekly pocket money and we had to use that to pay for the anything that we were doing. We still had a list of chores to complete around the home and that became tied to us receiving our allowance.
By the time I was 15, I had my first part-time job and that is when pocket money ended and I became responsible for my wants. My parents had set us all up a bank account from a young age. We would bank our money to save up for bigger items such as a bike or a pair of earrings and when we had reached our goal, our parents would help us withdraw our money and purchase our prize.
My parents taught me how to save, how to wait for the things I wanted, how to work hard to earn the money and how to spend my money thoughtfully and carefully. I am SOOOOO grateful to my parents for teaching me these things.
It’s really interesting when I think about kids and money these days. There is this assumption that parents are just handing over their hard-earned cash to their kids without much thought.
In a recent ‘50 Years of Pocket Money’ report conducted by Teacher’s Mutual Bank, they found that children are 21 per cent more likely to have to work to receive pocket money than in past generations – busting the myth that Gen Z have it easy.
The report showed that Australians are committed to educating children about financial literacy through pocket money, and kids are putting in the effort to earn it. Isn’t that very interesting and encouraging to know that we (as Aussie families) are teaching our kids about money.
According to the report, running errands, gardening and mowing the lawn have largely been phased-out over the years, while children in 2016 are increasingly expected to help with laundry duties and looking after the family pet. Teachers Mutual Bank found that the top pocket money chores for children in 2016 included tidying the bedroom (85%), setting the dinner table and/or cleaning up (77%), taking out the rubbish (67%), looking after pets (66 per cent) and cleaning the house (50%).
How to Spend It?
When it comes to coaching children how to save and spend, most Australians surveyed thought that parents should have some say in how the money is spent. This is certainly the way that it works in our house! We talk to our kids about their goals around pocket money, and encourage them to put some aside for charitable giving and help them to plan for the bigger things that they want.
Often we try to guide the children to balance their spending between experiences and possessions. We tend to pay for holidays but they will sometimes use their own money to add a ride, lesson or something just for them. We discourage impulsive spending in most situations … certainly on anything expensive.
How do you guide your kids with their spending?
We recently asked our schoolmums this question and one mum replied that she paid her kids pocket money from the first day they started school. One child spent all her first allowance on an arcade game and needed dad to bail her out for the rest of the week. Now she looks after her own budget for clothes, haircuts, beauty products, outings and birthday presents. As a teenager, she lives within her allowance and scrimps and saves to buy big ticket items.
It’s amazing to see them learn haha
School can also be a great place to practice spending small amounts of money because the tuckshop is often a very kid friendly shop. Some mums suggest sending the exact money at first for 1 item and over the years increasing it to a small total that they manage over the week or month.
Cash or Card?
Without a doubt the world is moving quickly toward being cashless … we spend most of our money via cards, internet banking and direct debits. We should be training our kids to operate in this way even now with their pocket money.
With this need for a cashless option for children in mind, Teachers Mutual Bank have started offering a pilot program that gives parents and kids an innovative and fun platform to help manage money together.
Spriggy is a prepaid card and mobile app for 8-18 year olds that will allow parents to easily allocate money to their kids, add money to their child’s prepaid card and encourage saving. Together families can set saving goals and see the progress.
This is very forward thinking of Teachers Mutual Bank and I think it’s awesome that they are helping families prepare their kids for the world that they will undoubtedly live in. I am looking forward to testing this out myself!
If you would like to know more about the program for members, visit https://www.tmbank.com.au/
The Research!
